The big news this week was Federal Reserve Chairwoman Janet Yellen testifying before the Senate Banking Committee.
Investors were interested to hear what the Fed’s leader would say about the economy and the chance of another interest-rate hike at the March Federal Open Market Committee meeting. And based on Yellen’s comments, a March increase in key interest rates is still unlikely … but not off the table entirely.
There are reasons for skepticism, of course, given the previous years of all talk and little action on higher interest rates. But given the continued strength of the U.S. economy and the political climate in Washington, a path of tighter monetary policy seems likely in 2017.
That could come at a very bad time for borrowers who can’t afford higher interest payments, and a nation already on the edge of a debt crisis.